Corporate governance report Remuneration continued EXERCISE OF LTIP AND SHARESAVE OPTIONS Other payments FOLLOWING TERMINATION OF EMPLOYMENT The Committee reserves the right to make any other LTIP payments in connection with a Director’s cessation of office If a participant leaves the employment of the Group, the or employment where the payments are made in good following provisions apply to options granted under the LTIP: faith in discharge of an existing legal obligation (or by way of damages for breach of such an obligation) or by way • Options that have vested but have not yet been exercised of settlement of any claim arising in connection with the may be exercised within six months of cessation of cessation of a Director’s office or employment or for any fees employment (12 months in the case of death). for outplacement assistance and/or the Director’s legal and/or • Except in the case of dismissal for gross misconduct, professional advice fees in connection with their cessation of options which have not yet vested, but where the office or employment. performance period has elapsed, may be exercised within six months of the relevant vesting date (or 12 months in CHANGE OF CONTROL AND OTHER CORPORATE the case of death), to the extent that the performance EVENTS condition has been met. The Remuneration Committee has Share bonus awards discretion to allow earlier exercise but would only use this Share bonus awards will vest on a change of control or in exceptional circumstances (such as death or ill health winding up of the Company before the originally anticipated retirement), or at its discretion for a good leaver. vesting date. If vesting is during the performance period, • If the participant leaves the Group before an option has the extent of vesting will be determined by reference to vested and before the performance period has elapsed, the performance conditions and, unless the Remuneration the option will usually lapse. Except in the case of dismissal Committee determines otherwise, a reduction to reflect the for gross misconduct, the Remuneration Committee has proportion of the performance period that had elapsed at the the discretion to allow the exercise of options for which date of the relevant event. the performance period has not elapsed at the date of cessation of employment, within six months of the relevant LTIP vesting date (or 12 months in the case of death). The Remuneration Committee also has discretion to allow The following provisions apply to awards made under the earlier exercise. The Remuneration Committee would only Long-Term Incentive Plan in accordance with the Plan rules if use this discretion in exceptional circumstances (such as there is a change of control or winding up of the Company: death or ill health retirement), or at its discretion for a good • Any vested but unexercised options may be exercised. leaver. • Any options in respect of which the performance period has • Any exercise would be subject to assessment of the elapsed and to which the performance condition has been performance condition (and the exercise of any discretion applied will vest and may be exercised. to vary formulaic outturns in line with the policy table) and, • Any options in respect of which the performance period unless the Committee determined otherwise, a reduction to has not elapsed may be exercised at the discretion of the reflect the proportion of the performance period that had Remuneration Committee, subject to any adjustment to take elapsed at cessation. into account the amount of time that has elapsed through the • If early exercise is permitted, the Remuneration Committee performance period (unless the Remuneration Committee may apply an adjustment to take into account the amount of decides not to apply a time-based reduction) and the extent time that has elapsed through the performance period and to which any performance criteria have been met. the extent to which any performance criteria have • The Executive Director may agree that his or her awards been met. are ‘rolled over’ into shares of the acquiring company as an In all cases, LTIP awards would be subject to the applicable alternative. malus and clawback provisions. If the Company has been or will be affected by any demerger, dividend in specie, special dividend or other transaction Sharesave which will adversely affect the current or future value of any If a participant leaves the Group, options granted under the awards under the LTIP or any share bonus awards, the plan Sharesave will normally lapse, but may be exercised within rules allow the Remuneration Committee, acting fairly and six months from the cessation of employment due to injury, reasonably, to determine the extent to which any awards disability, retirement, or redundancy (or 12 months in the should vest and the period within which options may be case of death), or the employing company leaving the Group exercised. or, provided that the option has been held for at least three years, cessation for any other reason (apart from dismissal by A copy of the plan rules is available from the Company the Company). Secretary on request. 150 DUNELM GROUP PLC ANNUAL REPORT & ACCOUNTS 2021